3 Stocks I Saw on TV
Melissa Lee began CNBC's "Fast Money" by asking, "Are we near the bottom or is there more ahead?" Tim Seymour mentioned how the ADP numbers released today simply showed the economy is in a weakened state. Regarding today's market action, Guy Adami says the weakness in the market probably had to do with people nervous that "tomorrow will be very illiquid," since it will be a shortend trading day as we enter the holiday weekend. So Adami said the selloff had a lot to do with people who simply "wanted to get out today." Pete Najarian said the selloff had a lot to do with the surge in oil in the latter half of the trading day. He said "when oil surged, the market began to drag down and fall apart." Karen Finerman said "coal took a bath today." Najarian said "we've watched coal run, run, run, and today it fell apart." He suggests you do what he has been doing and that is positioning himself with put options so when something like coal falls apart, you are protected. Melissa mentioned she heard from investors that the pullback in coal is simply profit-taking from yesterday's run-up.
Seymour also believes the pull back in coal is profit-taking. He said to keep in mind that even though coal was down today, it is still up for the quarter. Adami mentioned how United States Steel ( X) "is down about 21% in one week." He also said "I would like to say this is a buying opportunity" but cannot do so. He says as much as the stock may be cheap right now, it could go even lower.
Seymour commented by recommending a stock with emerging market exposure, Empresas ( ICA). He feels the stock is a good play right now. Melissa changed subjects by asking panelists, are "industrials a good play now?" Adami began by mentioning Caterpillar ( CAT). He said Caterpillar "has been a very volatile stock." He also stated, on a "valuation basis, it is interesting," but that doesn't mean the stock can continue to go down. Seymour said the market is simply "waiting for commodities to crack" before it moves in the positive direction. Melissa mentioned General Motors ( GM) closing below $10. Merrill Lynch ( MER) announced the automaker will need to raise money or face possible bankruptcy. Adami said although he said he saw no capitulation yesterday or today, he was wrong thinking yesterday was the trade, but he still see the stock "setting itself up for a trade." Melissa mentioned breaking news, saying CEO Michael Dell bought 4.5 million shares of his own company. Adami said "I can't get bullish on Dell ( DELL) until it breaks its resistance at $24." Najarain decided to talk about SanDisk ( SNDK). He mentioned the stock was up 6% today and he noticed option activities were more active than usual. He believes there is "someone that thinks that something is good" in the near-term, he suggests keeping an eye on this stock. Melissa announced more news, stating NVIDIA ( NVDA) was down about 21% to $14.20 after hours after lowering its sales outlook.
Najarian mentioned with the stock trading at these levels, it might make it a buy-out candidate. Adami said Intel ( INTC) was looking at NVIDIA last year. He said he's "not sure if it'll look at it now but it's a possibility." Adami started to talk about Lehman Brothers ( LEH) after being upgraded by Morgan Stanley ( MS). He said he has been looking for a capitulation on Lehman, but has not seen it yet. He said "I wouldn't run into Lehman after the Morgan upgrade." Najarian agreed with Adami but added that "those who have tried to pick a bottom in financials have been beaten down with a stick." He said "until we start to see strength there, I don't think we'll see anything." Joe Terranova, chief alternative strategist of Phoenix Investment Partners, came on the show and said, "when the oil goes up at the last few minutes in trading, it tells you something." He also said he believes liquidity is drying up, which could make things interesting on how oil will trade. He also mentioned that the "NYMEX will be trading on Friday," which should also be interesting to see how oil will trade. Overall, he said the best play for investors is to be in integrated oil plays. Lastly, he said "oil will take a hit like coal did today" and that is why integrated oil is the best play. Melissa mentioning the developments of Yahoo! ( YHOO) possibly in talks to sell its search business to Microsoft ( MSFT).
Gene Munster, managing director for Piper Jaffrey, stated he feels Microsoft will ultimately buy Yahoo!." He beleives Microsoft will eventually buy the whole company, and not just the search, as it would be the best strategic move to compete with the likes of Google ( GOOG). Later in the show, Mike Darda, chief economist for MKM partners, also came on to speak about the weakening dollar and how Bernanke does not seem to be handling the situation correctly. He feels had the Fed raised interest rates, rather than leave it at its current rate, the market would have rallied. He also stated that if there is a "triple-digit decline in jobs," that it would be bearish, as the market would put Bernanke in a seriously tough position, handling inflation and the weakening dollar. Adami mentioned the various times they have recommended Evergreen Solar ( ESLR) as a trade. The stock seems to spike on news and then head back down. He "mentioned, now is the time to build the positions, buy on troughs, sell into the rallies." Melissa said Intel and NVIDIA were down after hours. Just like yesterday, Adami recommended another "All-American" stock play. He recommends McDonald's ( MCD), saying its "kicking it in Europe and doing well in the U.S." Dennis Gartman, "The Commodities King," came on the show to talk about whether the ECB chief will raise rates. He believes "they will raise rates," but that should be of no surprise, as they have hinted this to everyone. Adami asked whether there could be some positive news that could assist the dollar from the ECB? Gartman stated, the "dollar is under pressure right now" and he does not believe there will be any news to boost the dollar. He ended by saying, "I don't like what is happening in the steel" as the steel and coal took a hit during today's market trading.